Silicon Valley Bank case study: The role of the CRO in managing risk programmes to prevent bank failures

Steven Haynes
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Steven Haynes: Director of Risk Management and Cybersecurity Programmes and Assistant Professor of Practice, University of Texas at Dallas, USA

Journal of Risk Management in Financial Institutions, 2024, vol. 17, issue 3, 249-257

Abstract: Financial disasters can have catastrophic consequences for economies that extend beyond the organisational walls. This case study will examine the downfall of Silicon Valley Bank by exploring ineffective risk management practices and the absence of the Chief Risk Officer (CRO). It will begin by establishing a basic understanding of the bank's history and client base before diving into the events that led up to the third-largest bank run in US history. In our upcoming discussion, we will delve into the risk management standards that financial organisations typically employ to avoid insolvency. Additionally, we will emphasise the pivotal importance of the CRO role within such institutions. Finally, the study will conclude by emphasising the critical role of robust risk management practices, effective regulatory oversight and organisational reforms in mitigating the risks associated with financial disasters and safeguarding the resilience of the banking ecosystem. Understanding the impacts and lessons of past financial disasters is essential to build a more stable and resilient economic landscape as the financial system evolves.

Keywords: financial disasters; Silicon Valley Bank; risk management; Chief Risk Officer; CRO; bank run; regulatory oversight; organisational culture (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2024
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